Who’s the boss?
By Barbara Johnson
(This article first appeared in BeautyNZ Magazine March/April 2008. Updated August 2011.)
You might well wonder as a new employee walks out the door after just one week… or you read about yet another Employment Court decision against an employer.
You may feel as if employers don’t have many rights but YOU are the boss. With careful planning and some helpful resources, you can be in control of the situation. The time to start thinking as a boss is before you employ your team. Know what outcomes you want from all situations with your staff – how they should dress and behave in the workplace; how much you expect them to earn for the business; what you will do if they don’t perform; who will pay for training courses; how you will reward good performers, and how you will deal with difficult situations or disputes.
Build these expectations into your house rules and into your employment agreements, and have both approved by an employment adviser or by an organization such as the Labour Department or EMA. The Department of Labour website (www.ers.dol.govt.nz) explains your rights and responsibilities as an employer. Now you are ready to start interviewing!
Guide to hiring
The government’s Biz website has a comprehensive guide to hiring staff www.business.govt.nz, or you may prefer to use an agency. Once you make a decision, set performance criteria as part of the recruitment process. Include this in the employment agreement, and if you have a commission scheme, make sure it is clear to the new person, including any consequences of not reaching performance targets.
An employer’s next task is tax. The Inland Revenue Department website covers your responsibilitieswww.ird.govt.nz. Make sure the employee has completed and signed an IR 330 form before you pay any wages. If the thought of preparing wages and PAYE returns is daunting, speak to your accountant, or Google “payroll services”. For a reasonable fee, payroll companies will handle all your payroll responsibilities.
Make sure your pay rates are up to date. Find the most recent minimum wage rates on www.dol.govt.nz. As these are minimum rates, you will have to pay more to attract and keep good staff. Know what your employees are entitled to – holiday pay, parental leave or special leave.
Check commission scheme
If you have an incentive or commission scheme, have your financial adviser check it to ensure you are not paying all your profit to your team. And if you are one of those business owners who cannot find a good thing to say about Generation Yers – think again! These young people are your business’s future, both as staff and clients, so get to know them and what makes them tick. To find out more about employing Gen Y staff; Google “managing Generation Y” – you should find lots of tips and information about this “echo boomer” source of talent!
Once you have your team on board, protect yourself and your business. Because you have already decided how you will act as boss, you will have a strategy for when:
- A new employee takes a day off sick (don’t pay them until they have been with you for six months)
- An employee leaves and attempts to take clients with them (your employment agreement should also state that the client database is the property of the business, entitling you to take action against them)
- An employee leaves just when you have finished training them (your employment agreement should also state that cost of training is to be reimbursed if the staff member leaves within a certain period of completing the training)
- An employee is under performing or causes problems in the workplace (have the services of a good employment adviser ready, or contact a service such as EMA (www.ema.co.nz) for employment advisory assistance. Every employer has times when a situation gets difficult – don’t try to go it alone as it could be a very costly and painful exercise for both you and your business.)
Final word
Enjoy! You and your team are going to spend more time with each other than your nearest and dearest. You can make the most of the situation by first setting the rules, then setting the tone, and with an eye on the bottom line, you really will be The Boss!
Oborn & Johnson is a friendly, down to earth company, located in Takapuna, North Shore City. We have been specialising in accounting, tax and related services to businesses, investors, trusts and individuals, for over 35 years.